Debt spiral warning: Credit cards used to pay mortgage

11/01/2010

People with mounting debt have been warned of the dangers of paying for housing with a credit card.

More than a million people struggling with debt have turned to credit cards to pay rent or mortgages, a YouGov poll carried out for the charity Shelter revealed.

Six per cent of people surveyed claimed that they had used a credit card to pay off their mortgage or rent in the last 12 months.

Kay Boycott, director of policy and campaigns at Shelter, commented: "This is a shocking discovery, that over a million households in Britain are in such desperate circumstances that they need to borrow money on credit cards to pay for basic housing costs.

"If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer."

The worst case scenario for people who have been forced to use credit cards to pay for housing is repossession, according the charity.

Kevin Still, director at EuroDebt, commented: "Over 20% of clients starting Debt Management Plans with EuroDebt have mortgage or rent arrears, but this seems to be the tip of the iceberg.

"If you are struggling to make priority payments and having to use your credit cards then this will lead to a debt spiral – we recommend taking debt advice now, as the cost of borrowing on cards is high and will soon catch up with you."

Tags; Housing Debt and Bills,

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